Tax Appeals Reinstated: Petitioners Granted Pathway to Challenge Assessments Despite Tribunal Vacancy Under CGST/OGST Act

SC addressed the non-constitution of Appellate Tribunal under CGST/OGST Act, which impeded statutory appeal rights. The court granted petitioners relief by allowing appeals within a specified timeframe upon tribunal constitution, subject to 20% tax deposit. Specific directions were provided to ensure petitioners could exercise their appeal rights while maintaining procedural compliance with tax regulations.

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Issues:
Non-constitution of Appellate Tribunal under CGST/OGST Act depriving Petitioners of statutory remedy of Appeal.

Analysis:
The judgment addressed the issue of non-constitution of the Appellate Tribunal under the Central Goods and Services Tax Act, 2017 (CGST Act) and Odisha Goods and Services Tax Act, 2017 (OGST Act), which deprived the Petitioners of their statutory remedy of Appeal. It was acknowledged that the orders impugned in the writ applications were appellable under section 112 of the CGST/OGST Act, but due to the absence of the Appellate Tribunal as required under section 109 of the Acts, the Petitioners were unable to avail their statutory remedy. The Government of India, under section 172 of the CGST Act, issued the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, providing a mechanism for calculating the time period for filing appeals in the absence of the Tribunal.

The judgment referred to the Removal of Difficulties Order dated 03.12.2019 and a subsequent clarification issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing through Circular No.132/2/2020-GST. The Order and Circular clarified that the appeal to the tribunal could be made within a specified time frame from the date of communication of the order or from the date on which the President or State President of the Appellate Tribunal enters office, whichever is later. It was advised that appellate authorities should dispose of pending appeals promptly without waiting for the constitution of the Appellate Tribunal.

In light of the above legal provisions and clarifications, the Court made specific directions in the judgment. Firstly, it granted the Petitioners the statutory benefit of stay on the condition of depositing a sum equal to 20 percent of the remaining tax amount in dispute. Secondly, the Court required the Petitioners to file their appeals under Section 112 of the CGST/OGST Act once the Tribunal is constituted and operational, observing the statutory requirements for appeal consideration. Lastly, if the Petitioners chose not to file an appeal within the specified period upon the Tribunal's constitution, the respondent-Authorities were permitted to proceed further in the matter in accordance with the law.

The judgment concluded by disposing of the writ applications with specific directions and observations, providing the Petitioners with the necessary guidance on availing their statutory remedy of appeal in the absence of the Appellate Tribunal.

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